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George makes bowling balls in his Miami plant. With recent increases in his costs, he has interest in efficiency. George is interest in determining the probability of his organization. He would like to know if he organization is maintaining the manufacturing average of a 3% increase in productivity. He has the following data representing a month from last year and an equivalent month this year. The percent change in productivity for one month last year versus one month the year on a basis with dollars as the common denominator = % (enter your response as a percentage rounded to two decimal place)
Expert Answer
Total cost for any year , $
= Labour ( hours) x Cost ( $)/ hour + Resin/ Pound x Cost , $/Pound +1% x Capital Investment ( $) + Cost per BTU x Energy ( BTU)
= 10.Labour ( Hours) + 5.Resin ( Pound) + 0.01xCapital Investment + 0.50xEnergy ( BTU)
Thus,
Total cost last year, $
= 10 x 300 + 5 x 48 + 0.01 x 9000 + 0.50 x 2900
= 3000 + 240 + 90 + 1450
= 4780
Total cost this year , $
= 10 x 275 + 5 x 43 + 0.01 x 10000 + 0.50 x 2750
= 2750 + 215 + 100 + 1375
= 4440
Thus,
Multifactor Productivity last year
= 1200 units produced / Total cost
= 1200 /4780
= 0.251 per $
Multifactor Productivity this year
= 1200 units produced / Total cost
= 1200/ 4440
= 0.270 per $
Thus percentage change in productivity from one month last year to one month this year
= ( Multifactor productivity this year – Multifactor productivity last year) / Multifactor productivity last year x 100
= ( 0.270 – 0.251 ) / 0.251 x 100
= 0.019 / 0.251 x 100
= 7.57 % ( rounded to 2 decimal places )
| PERCENTAGE CHANGE IN PRODUCTIVITY FROM LAST YEAR TO THIS YEAR = 7.57% |
